Activity Based Costing- A New Area of Management Accounting

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The traditional management accounting system is developed by implementing the management principles of Taylor which has a very wide prospective, but if the present economic environment is considered then it can easily be seen that the demand and the consumption pattern is continuously changing. So each and every manufacturing firm has to change their procedure of production with the improvement of technology. Activity Based costing is a new technique which makes a detail allocation of cost among its cost centers as per the activity and helps to ascertain the actual cost of the product based on the activity. So the objective of my study is to find out the impact of the new management accounting procedure over the traditional one. For these purpose two companies from US are selected. Out of those two, one is using traditional method but the other one is using both traditional and ABC costing. The selection is made for the comparison purpose. The study will also help to find out the cost involve for adopting this technique and whether it is affordable by them or not. Following are some research questions which enable to conduct the study further-

How the costs are allocated between cost centers under the traditional methods?
How the activities are priorities under the new method?
What is the probable implication if only the ABC costing technique is applied to the selected companies?